In 2003, the Environmental Protection Agency concluded that it lacked authority under the Clean Air Act to regulate carbon emissions as the cause of global warming.

Because carbon emissions result from nearly all economic activity, the ruling made sense, as Congress never intended the EPA to regulate the entire economy.

But Big Green environmentalists were outraged. They teamed with allies in state and local governments to sue the EPA to force it to reverse its ruling in a case known as Massachusetts v. Environmental Protection Agency.

The petitioners in the case featured multiple Big Green outfits that specialize in litigating environmental causes, including the Natural Resources Defense Council, the Environmental Defense Fund and the Conservation Law Foundation.

Litigants on both sides were astounded when in 2007, the Supreme Court ruled in a 5-4 decision that the EPA does indeed have the authority to regulate carbon emissions under the Clean Air Act. Critics called it a fundamentally flawed decision and predicted its reversal in the near future.

But until then, Massachusetts is probably the most significant legal decision in Big Green's history because it opens the door to the agency using global warming as a threat to justify its regulation of anything that can be remotely linked to carbon creation or use.

Among the least discussed aspects of the case is found in a search of the EPA grants database that shows NRDC, EDF and CLF received federal funding totaling $7,656,829 from the EPA during the past decade.

That meant EPA was in effect using tax dollars to help fund a lawsuit against itself that ultimately resulted in the agency acquiring unprecedented regulatory authority. Whether it will ever actually be able to exercise that authority is very much open to question.

When President Obama's EPA administrator, Lisa Jackson, took the first step last year by issuing an endangerment finding for greenhouse gases and threatened to begin regulation if Congress failed to pass the proposed cap-and-trade energy reform bill, senators and representatives were put on notice.

Democrats in Congress were worried about what EPA greenhouse gas regulation would do to the industry deals they had cut in support of their own cap-and-trade legislation to regulate carbon emissions.

Republicans rallied in the Senate behind a proposal prohibiting the EPA from regulating carbon emissions. It failed despite having support from six Democrats.

Sen. Jay Rockefeller, D-W.Va., has since proposed a bill that would prevent the EPA from regulating carbon emissions but just for the next two years. A number of Democrats who voted against the GOP bill are expected to support Rockefeller's bill.

But there's an even bigger carbon regulation threat than the EPA. In 2004, three environmental groups, the Open Space Institute Inc., Open Space Conservancy Inc. and the Audubon Society of New Hampshire, joined Democratic state governments to sue six big power companies over carbon emissions in State of Connecticut et al. v. American Electric Power et al.

The public nuisance suit “listed current injuries from climate change, for example, flooding in California from earlier melting of snowpack, and expected future injuries if emissions were not abated,” according to the Pew Center on Global Climate Change. Initially, a district court in 2005 dismissed the lawsuit as a “non-justiciable political question.”

On appeal, the Second Circuit Court reversed, stating “the federal courts are competent to deal with these issues.” Curiously, environmental allies in the Obama administration filed a brief last month urging the Supreme Court to vacate the Second Circuit's decision. There's a lot more to the legal strategy here than is readily apparent.

The brief notes that using carbon emissions as a basis to assert legal injuries would lead to an unmanageable legal free-fire zone where “nearly all landowners … governments, individuals, corporations, and interest groups throughout the nation and around the world” could file tort lawsuits claiming damages.

Obama wants the lawsuit tossed because “in light of multiple actions that EPA has taken since the court of appeals issued its decision, any otherwise cognizable federal common-law claims here have been displaced.” In other words, Obama doesn't want the Supreme Court to decide if regulating carbon emissions is a political question. Federal courts traditionally leave political questions to Congress.

Obama wants a ruling that the EPA's carbon rules “displace” the need for public nuisance suits — rather than a ruling declaring such lawsuits are invalid. That means that those opposed to carbon regulation would be forced to choose between endless tort lawsuits with open-ended damages or carbon regulation through the EPA.